The Federal Reserve on Wednesday voted against raising interest rates in the wake of a dismal jobs report.
It seemed at one point the Fed would hike interest rates in June, but May's jobs bombshell, low inflation and geopolitical headwinds were too much for the Fed to ignore.
While economic growth "appears to have picked up," jobs gains had "diminished" and "business fixed investment has been soft." The U.S. generated only 38,000 jobs in May.
Looking at projections offered by the Fed this afternoon, six officials predict single rate hike this year, up from one at the previous meeting.
Their so-called 'Dot plot' still signals two rate increases this year, even though the Fed reduced their 2016 GDP forecast to 2% from 2.2%.
Inflation is not expected to rise to the Fed's 2% target by the end of 2018.
There was little indication of when the next rate hike will come, although most analysts say a move in July is highly unlikely.
In a press conference after the decisions, Fed Chair Janet Yellen sounded cautiously optimistic in her assessment of the U.S. economy.
She insists the slowdown in first quarter growth "appears temporary," and that "wage growth may finally be picking up."
There was no mention of anxiety over the possible exit of the UK from the European Union in the official Fed statement, but Yellen admitted the Brexit "was one of the factors" in keeping rates unchanged.
Yellen demurred when asked to predict when the Fed will hike rates. "We're quite uncertain about where rates are heading in the longer-term," she said. "Every meeting is live."
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.